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$14.3 Million Settlement for Probationers Subject to Extortion by Private Company

Pathways (formerly Providence) Community Corrections (PCC) and officials in Rutherford County, Tennessee agreed to settle a class-action lawsuit over predatory practices by the for-profit probation company. The $14.3 million settlement provides compensation for nearly 30,000 people who were trapped by PCC in a cycle of debt, endless probation extensions and jail.

The suit, filed on October 1, 2015 by Equal Justice Under Law, alleged PCC took over Rutherford County’s probation system and the county paid nothing for the service. PCC then “earned its millions in annual profits by extorting money from the impoverished people that it was supposed to be supervising,” Equal Justice said in a September 2017 statement announcing the settlement. “PCC executed its extortion by jailing probationers who could not afford PCC’s private fees.”

As previously reported in PLN, a federal district court granted the plaintiffs’ motion for a preliminary injunction in December 2015, prohibiting the use of money bonds for misdemeanor probation violation warrants. The injunction affected nearly 10,000 cases, and PCC, which was purchased by Molina Healthcare, Inc., subsequently stopped providing for-profit probation services in Rutherford County. [See: PLN, July 2017, p.61; Nov. 2016, p.42].

The settlement agreement prohibits the county from contracting with a private probation company in the future, and requires waivers of misdemeanor fines and fees for people who earn below 125 percent of the federal poverty line. It also ends the practice of imposing probation on people who cannot afford the costs.

Further, the settlement requires PCC to pay Rutherford County $350,000 to resolve claims between those parties. Once it receives that payment, Rutherford County will contribute $300,000 to $14 million provided by PCC to create a $14.3 million settlement fund.

The class, which is comprised of persons who incurred court-imposed fines from a traffic or misdemeanor case and were placed on supervision by PCC or Rutherford County’s probation department after October 1, 2011, are entitled to monetary awards.

Each class member is “entitled to receive a cash award equal to one hundred twenty-five percent (125%) of the amount that he or she actually paid to PCC for PCC fees.” In addition to those awards, people who were on probation with PCC on or after October 1, 2014 will receive a cash award “equal to fifty dollars ($50) for each month” they were on probation after that date. Those on probation with Rutherford County’s probation department on or after March 2016 for the sole purpose of paying court-imposed financial obligations, who would have been removed from probation absent such an obligation, will receive $50 for each month of supervision.

The award of attorney fees totaled nearly $1.4 million. The settlement provides for the Civil Rights Corps to receive $336,200, plus $830,800 for Equal Justice Under Law, $190,000 for the law firm of Baker, Donelson, Bearman, Coldwell & Berkowitz, and $24,115 for attorney Kyle Mothershead. The seven named plaintiffs in the case will receive $10,000 each in incentive awards.

Phil Telfeyan, executive director of Equal Justice Under Law, said the settlement “sends a clear message to private probation companies all across the country: you will pay for violating probationers’ constitutional rights.” See: Rodriguez v. Providence Community Corrections, Inc., U.S.D.C. (M.D. Tenn.), Case No. 3:15-cv-01048.


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Related legal case

Rodriguez v. Providence Community Corrections, Inc.